U.S. Commerce Department Unveils Details of CHIPS Act
- September 7, 2022
- Posted by: Quatro Strategies
- Category: Legislation
Biden signed the U.S. CHIPS and Science Act into law on Aug. 9, marking a victory for his administration after a months long battle ended with broad bipartisan support. Still, there had been criticism over where exactly would the $50 billion funding go. The U.S. Department of Commerce finally detailed some of those plans, outlining where that funding will be used in its guideline. It reiterated the legislation’s key targets, and underlines that the money will be focused on getting the U.S. back on track with domestic semiconductor production, building a back-stock of chips and creating jobs.
To be eligible for funding, the company must produce chips in the United States. That includes constructing and operating those factories domestically.
More specifically, $39 billion will go toward developing domestic manufacturing, $28 billion of which will arrive as incentives for manufacturers to design next generation chips. Separately, $11 billion is focused on R&D programs. That includes the establishment of the National Semiconductor Technology Center (NSTC), which the Commerce Department describes as a public-private entity, which will bring together companies, the Department of Defense, the Department of Energy and the National Science Foundation to design and prototype chips.
“Rebuilding America’s leadership in the semiconductor industry is a down payment on our future as a global leader. CHIPS for America will ensure continued U.S. leadership in the industries that underpin our national security and economic competitiveness. Under President Biden’s leadership, we are once again making things in America, revitalizing our manufacturing industry after decades of disinvestment and making the investments we need to lead the world in technology and innovation.” Commerce Secretary Raimondo stated.
According to the guideline, the Department of Commerce has identified four strategic goals for the CHIPS for America Fund:
- Invest in U.S. production of strategically important semiconductor chips, particularly those using leading-edge technologies.
- Assure a sufficient, sustainable, and secure supply of older and current generation chips for natural security purposes and for critical manufacturing industries.
- Strengthen U.S. semiconductor research and development leadership to catalyze and capture the next set of critical technologies, applications, and industries.
- Grow a diverse semiconductor workforce and build strong communities that participate in the prosperity of the semiconductor industry.
The Department emphasizes in the report that these objectives go beyond supporting the construction of a few semiconductor manufacturing facilities, also known as “fabs.”
“Over the long term, the CHIPS for America Fund must enable and sustain a vibrant domestic industry that supports quality jobs, a diverse workforce, and a robust supplier base of large and small firms, while revitalizing high-volume semiconductor manufacturing, renewing U.S. strengths in design, materials, and process innovation, and benefiting the broader economy. Achieving these goals will require new thinking and partnerships from policymakers and the private sector to unlock the productive capacity of industry, workers, and communities.” the report further suggests.
The Department also highlights that it is imperative to engage and cooperate with stakeholders throughout the implementation of the CHIPS program.
Subscribe to Top Insights Today
The Executive Newsletter -Top Insights Today- puts global business events in perspective through special insights
Join the ranks of global executives and subscribe to Top Insights Today
Top Insights Today covers insights on energy, clean-tech, oil&gas, mining, rare earths, defense, aviation, infrastructure, manufacturing, electrical vehicles, big-tech, finance and politics of business
Read more insights
Japan Working to Diversify Rare Earths Supply
Japan is looking to diversify its supply sources of rare earth minerals as the country’s imports have climbed in recent years due to growing demand for electric vehicles (EVs), wind turbines and other products that use permanent magnets. Japan has realized over a decade ago how important supply security of rare earths was, after China restricted exports to the country in 2010 amid a political dispute. Although Japan had signed a deal with Vietnam to explore rare earths, domestic production in the Southeast Asian nation still remains limited. According to Japanese customs data, more than two thirds of Japan’s rare earths come from China.
California’s Lithium Tax Could Delay Deliveries, Push Companies Out
Mining industry executives think a proposed flat-rate tax on lithium produced in California’s Salton Sea region would delay shipments of the electric vehicle (EV) battery metal to General Motors and Stellantis; and may force some mining companies to exit the state entirely.
EU’s Price Cap on Russian Diesel May Deter Big Asian Buyers
The proposed $100 per barrel EU price cap on Russian diesel may be high enough to allow Moscow continue to export the fuel, but it could essentially deter big Asian buyers, who have become used to buying cheap Russian crude and refine it themselves. The European Commission is proposing a price cap of $100 per barrel on Russian diesel and a $45 per barrel on discounted products like fuel oil. The price caps on oil products, which is set to take effect from Feb. 5, are part of Western measures to curb Moscow’s export revenues and limiting its ability to fund the invasion of Ukraine.